Zinc Prices Show Mixed Trends as LME Inventories Decline

Key Takeaways

• Price Movements: LME zinc fell slightly, while SHFE and MCX zinc showed modest gains, reflecting mixed market sentiment.
• Inventory Trends: LME zinc stocks dropped by 2,675 mt, adding price support, but SHFE supply increased, leading to fluctuations.
• Global Trade: Ukraine’s zinc imports fell 34.2% YoY, reshaping market flows, while exports remained minimal.
• Market Drivers: MCX zinc gained on expectations of PBoC stimulus, but weak downstream demand kept prices volatile.
• Technical Outlook: Immediate support is at Rs 269.9, with resistance at Rs 273.2. A breakout could push prices toward Rs 274.6.

Zinc Prices:

• LME: As of Last Friday, LME zinc opened at $2,917.5/mt, reaching a high of $2,940/mt and low of $2,881.5/mt, ultimately closing down at $2,920/mt, a decrease of $3/mt or 0.10%. Today, LME Zinc trading commenced at $2,909.4/mt.
• SHFE: As of Last Friday, the most-traded SHFE zinc 2504 contract opened at 23,980 yuan/mt. hitting a high of 24,160 yuan/mt, and closing up at 24,130 yuan/mt, an increase of 110 yuan/mt or 0.46%. Today, SHFE Zinc trading commenced at 23,990 yuan/mt.
• MCX: As of Last Friday, MCX Zinc prices opened at Rs 271.95/kg, reached the highest level of Rs 272.75, the lowest level at Rs 269.40/kg and finally closed down at Rs 271.85/kg, an increase of 0.30 or 0.11%. Today, MCX Zinc trading commenced at Rs 273.85/kg.

Zinc Supply & Demand:

• LME Opening Stock - 153600 | Live Warrants - 134350 | Cancelled Warrants - 19250
• LME zinc trading volume fell to 71,886 lots, while open interest increased to 230,000 lots. Zinc inventories dropped by 2,675 mt, supporting prices as regional tensions eased and overseas stocks declined.
• SHFE zinc trading volume decreased to 53,721 lots, with open interest rising to 81,772 lots. While market sentiment remains positive, domestic spot supply increased slightly, and downstream demand has yet to fully recover, leading to continued price fluctuations.
• MCX zinc edged up 0.11% to 271.85, driven by expectations of PBoC stimulus amid weak demand. However, rising SHFE zinc inventories and global production declines, including a 7% drop in China’s refined zinc output, suggest potential supply concerns. U.S.-China trade uncertainties add to market volatility.

Zinc News

• Fluctuating trend remains unchanged, SHFE Zinc records a bullish candle.
• MCX Zinc rises as PBOC signals timely policy adjustments to boost the economy.
• Ukraine reduced imports of zinc and zinc products by 34.2% compared to the same period in 2024 to $2,695 million. In December 2024, imports amounted to $3,802 million. Zinc exports in January amounted to $137 thousand (in December – $100 thousand), while in January 2024 it was at the level of $8 thousand.

Expert Opinion

In experts’ opinion, the zinc market is under short covering, with open interest falling by 19.63% to 1,372. Immediate support is at 269.9, with further downside potential to 268, while resistance is seen at 273.2, and a breakout above could push prices toward 274.6.